Uncertain which K-2 and K-3 Schedule sections to complete with foreign partners but no foreign income

You're on the right track with completing Part 2 as a protective measure. For partnerships with foreign partners but no foreign-sourced income, you should focus on: 1. Part 1 (Partnership's Income): Always required for all partnerships filing K-2/K-3 2. Part 2 (Foreign Tax Credit): Definitely complete as you mentioned 3. Part 10 (Foreign Partners' Character and Source of Income and Deductions): This is specifically required when you have foreign partners You can skip parts 3-9 since they generally relate to different types of foreign income, foreign taxes paid, or foreign branch operations that your partnership doesn't have. The IRS has been fairly strict about compliance with these schedules since their introduction. Better to provide the necessary information than risk notices or penalties later. Make sure to properly allocate domestic source income to your foreign partners in Part 10.

After struggling with these exact K-2 and K-3 schedules for our partnership (we have partners from Canada and the UK), I finally found a solution with taxr.ai (https://taxr.ai). The system analyzed our partnership docs and told me exactly which parts needed to be completed when you have foreign partners but domestic-only income. They confirmed I needed Parts 1, 2, and 10 completed but could skip the others. They also flagged that we needed to include certain disclosures in Part 1 that I would have completely missed. Their analysis saved me tons of research time and gave me specific line-by-line guidance rather than just general advice.

Just wanted to update that I tried taxr.ai after seeing it mentioned here. Uploaded our partnership docs and got a complete analysis in about 20 minutes. It was actually really helpful - confirmed we only needed Parts 1, 2, and 10 filled out, but also pointed out that we needed to include certain Section 871(m) dividend equivalent disclosures in Part 1 that I would have missed completely. What surprised me was how specific the guidance was - it didn't just say which parts to complete, but gave line-by-line instructions for our exact situation. Definitely worth it for the peace of mind, especially since we have partners in multiple countries. Will definitely use it again next year when the IRS inevitably changes these forms again!

If you're struggling to get through to the IRS for clarification on the K-2/K-3 schedules, I found a solution that actually works. I spent DAYS trying to reach someone at the IRS who could answer my specific questions about what sections to fill out, but kept getting disconnected or stuck on hold. I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c. I was totally ready to wait hours but the callback feature they use somehow bypasses the normal wait times. The IRS agent I spoke with confirmed that I only needed to complete Parts 1, 2, and 10 for our situation (foreign partners but domestic income), and also explained that certain disclosures in Part 1 weren't required in our case because we don't have any ECI income for our foreign partners.

I need to admit I was wrong about Claimyr. After my skeptical comment, I was desperate enough to try it when I couldn't get through to the IRS about our K-2/K-3 questions. Got a callback from an actual IRS agent in about 20 minutes. The agent clarified that with our specific partnership structure (we have Japanese investors but only US operations), we need to complete Parts 1, 2, 10, and surprisingly Part 11 because of certain treaty provisions with Japan. Would have never figured that out on my own. Saved me from potentially making a major filing error. Just wanted to share my experience since I was so publicly doubtful before. Sometimes you have to admit when you're wrong!

I've been preparing these K-2/K-3 schedules for the past three years and they're a huge headache. For partnerships with foreign partners but no foreign income, here's what worked for me: Complete Parts 1, 2, and 10. You can attach a statement explaining that you have no foreign income but are filing these schedules due to having foreign partners. In Part 10, make sure to properly characterize all your domestic income for your foreign partners. Also, check if any of your foreign partners are in treaty countries, as this can affect what information you need to provide in Part 11 (I noticed some comments mentioned this). Don't overthink it - the IRS is mainly concerned that foreign partners have the information they need for proper reporting in their home countries.

I'm super confused about these K-2/K-3 schedules. My software (TaxAct) is forcing me to fill out ALL the parts even though we only have one foreign partner and all US income. Is there a way to override this in the software so I only complete the necessary sections?

I went through this exact situation last year with our partnership that has German and Swiss partners but only domestic US income. After hours of research and calls to the IRS, here's what I learned: You're absolutely right to complete Part 2 as a protective measure. The required sections for your situation are: **Part 1 (Partnership's Income)** - Complete Section 1 even if all zeros. This shows you've considered each category. **Part 2 (Foreign Tax Credit Information)** - Required when you have foreign partners who might claim foreign tax credits on their personal returns. **Part 10 (Foreign Partner Information)** - This is crucial. You need to break down each type of domestic income (ordinary business income, rental income, capital gains, etc.) allocated to your foreign partners. Don't just show totals. **Part 11 (Treaty Benefits)** - Check if any of your foreign partners are from treaty countries. If so, you may need to complete this section to help them claim treaty benefits. One thing that caught me off guard: make sure to include the partner's country code and tax identification number from their home country in Part 10. The IRS has been very specific about this requirement. I'd also recommend attaching a brief statement explaining that you have no foreign-sourced income but are filing these schedules due to foreign partners. It helps clarify your filing position if the IRS has questions later. The good news is once you get the format down, it becomes much easier for subsequent years!